Federal Budget Analysis 2021

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Federal Budget Analysis 2021

On April 19, Canada’s Deputy Prime Minister and Finance Minister Chrystia Freeland delivered the 2021 Budget in the House of Commons. As the provinces and territories navigate lockdowns and the roll-out of vaccines nationwide, this year’s budget is one of the most widely anticipated since perhaps the 2009 Budget presented by Stephen Harper’s government at the height of the financial crisis. Yesterday’s budget follows the serious economic disruption caused by the COVID-19 pandemic. While the focus is clearly on COVID response and recovery there is billions being spent on non-COVID related items.

Citing the pandemic, the Trudeau government did not table a budget in 2020 – despite other G7 countries and provincial governments having done so – making this the government’s first fiscal plan since the party was elected in 2019. This budget, with its commitments to fund childcare, mandate a minimum federal hourly wage and allocation of billions towards reconciliation may not trigger an election but it is certainly an ‘election budget’ – one that Trudeau and his caucus can take into the next election.

On Budget 2021, Conservative Leader Erin O’Toole said: “Canadians were expecting a pandemic budget, this is an election budget.” Minister Freedland projects a deficit of $354.2B.

COVID-19

  • $3 billion investment to ensure that provinces and territories provide a high standard of care in their long-term care facilities
  • Extend EI sickness benefits from 15 to 25 weeks
  • Extend the wage subsidy and rent subsidy until September 25, 2021.
    • Estimated total of $12.5B of supports
  • Introduce the new Canada Recovery Hiring Program for eligible employers that continue to experience qualifying declines in revenues
    • This support would only be available for active employees and will be available from June 6 to November 20, 2021
    • It is estimated that this program will cost $595 million in 2021-22

JOBS/BUSINESSES

  • Invest $2.2B in biomanufacturing and the life sciences sector to bolster Canada’s manufacturing sector
  • Create more than 500,000 training and working opportunities.
    • 1 million jobs by end of fiscal 2021
  • Expand the Canada Workers Benefit with an investment of $8B – with additional support for low-wage workers
    • Will lift approximately 100,000 people out of poverty
  • Increase federal minimum wage to $15/hour
  • Invest $4B to help small and medium businesses buy and adopt the technologies they need to grow
    • They will have access to supports to help them transition online, etc.
  • Launch a Pan-Canadian Artificial Intelligence Strategy in geonomics and quantum science; areas where Canada is a global leader
  • Invest an additional $1B over 6-years in the Universal Broadband Fund to accelerate access to internet in rural and remote communities
  • Conclude a deal to tax large digital services companies, with the deal expected to be reached this summer
  • New luxury tax on new cars and private aircrafts worth more than $100,000 and pleasure boats more than $250,000

CLIMATE CHANGE

  • $5B over 7-years starting in 2021-2022 in the Net Zero Accelerator
  • Up to $8B of support for good jobs and projects that will help reduce domestic greenhouse gas emissions across the Canadian economy
  • $4.4B to the Canada Mortgage and Housing Corporation to help homeowners complete deep home retrofits through interest-free loans worth up to $40,000
  • $63.8 million over three years to Natural Resources Canada, Environment and Climate Change Canada, and Public Safety Canada to work with provinces and territories to complete flood maps for higher-risk areas
  • $2.3B over five years, with $100.5M in remaining amortization, to Environment and Climate Change Canada, Parks Canada, and the Department of Fisheries and Oceans to conserve up to 1 million square kilometers more land and inland waters.
  • $200M to build natural infrastructure like parks, green spaces, ravines, waterfronts, and wetlands

“RESILIENT CANADA”

  • Invest in a Black-led philanthropic fund to fight anti-Black racism
  • $5.7B to make post-secondary more accessible; doubling the Canada Student Grant – and increasing access to trades
  • Low-income post-secondary borrowers will have access to lower interest payments
  • Invest $30B over 5-years reaching $9.2B/year to build an early learning and childcare system across Canada.
  • Invest $2.5B and reallocate $1.3B in existing funding to help build 35,000 housing units and support the conversion of housing (local storefronts into condos) by re-allocating $300M Rental Construction Financing Initiative
  • On January 1, 2022 the Government will introduce the national tax on vacant property owned by non-resident
  • Invest $18 billion over the next five years, to improve the quality of life and create new opportunities for people living in Indigenous communities
    • This investment will help close gaps between Indigenous and non-Indigenous peoples, support healthy, safe, and prosperous Indigenous communities, and advance meaningful reconciliation with First Nations, Inuit, and the Métis Nation
  • Invest $6B for infrastructure on reserves and $2.2B for missing and murdered Indigenous women

Mackenzie Taylor is a Toronto-based Consultant at Cumberland Strategies and is known for her comprehensive knowledge of the legislative process and sound communications strategies. Mackenzie is well-versed in legislative affairs, strategic communications, and stakeholder relations.